Sydney, April 2025 – Insurance premiums across Australia have surged by over $30 billion in the past decade, with costs now rising more than twice as fast as inflation. A major driver behind these increases is the growing impact of extreme weather events—floods, bushfires, and storms—which have caused insurers to suffer average annual losses of $4.5 billion, a 67% jump compared to previous years.
According to the Climate Council, 2.2 million properties nationwide—around one in ten—are now considered at moderate to high risk from climate-related hazards. Of these, about 652,000 homes are either uninsurable or face severe coverage exclusions for risks like flooding or coastal erosion. Some areas, such as parts of regional NSW, Brisbane, and Shepparton in Victoria, have more than 80% of homes classified as “critical risk,” where insurance is unaffordable or unavailable altogether.
The Insurance Council of Australia warns that only 23% of flood-prone properties have adequate flood coverage. In contrast, national coverage rates sit at around 60%. This protection gap leaves many households dangerously exposed to disaster. The Actuaries Institute estimates that 12% of Australians are now experiencing “insurance stress”—spending more than four weeks’ income on premiums alone.
Meanwhile, home values in high-risk areas are starting to fall. New Proptrack data shows electorates like Richmond (NSW) and Page have already seen home prices decline or stagnate since 2022, in part due to climate hazard awareness and rising insurance premiums. As building costs also climb, insurers are passing the additional burden onto homeowners, making insurance less affordable for low- and middle-income families.
Experts from the Climate Council are calling for urgent government action, including buybacks, flood levies, and tougher planning rules to address the escalating risks. Without intervention, the number of uninsurable homes is forecast to rise to 1.3 million by 2100. As the climate crisis deepens, rising premiums are becoming a major contributor to Australia’s broader cost-of-living crisis—and for many, insurance may soon be out of reach.